Neutral. That’s the one-word takeaway from the latest long-term view from the team over at Pimco, which this morning published a 2014 secular outlook that looks ahead over the next three to five years. Some of it reflects thoughts and theme that have emerged in the investment letters penned by Pimco’s Bill Gross.

They’re calling it “the new neutral,” a play off the “new normal” moniker Pimco came up with several years ago. The outlook report is the result of Pimco’s secular forum, where its global investment team gathered in California to discuss themes and trends.

In the big picture, the managers of the world’s largest bond fund see a global economy that remains under the weight of a lot of debt, including a “sharp increase” in debt in China, and at the same time an economy that can’t generate demand that keeps up with potential output (and the two are not unrelated) . In the absence of a new growth model, the reality is most developed economies–and even some developing economies–are going to be a world of essentially 0% real interest rates.

“The total stock of public and private debt outstanding in the global economy is at an all-time high in dollar terms,” writes Richard Clarida, global strategic advisor. As a share of global GDP, this debt is higher than it was in 2007. “So while there is a consensus that an excess of private sector and European sovereign leverage contributed to the global financial crisis – and later the European sovereign crisis – there has been no decline globally in aggregate leverage.”

The upshot of all this is that even in a “multi-speed” world, nations will all converge toward “modest potential growth rates.” They see Europe’s GDP somewhere in the 1% range. China they expect will be in the 6-6.5% range as it takes its time and tries to wrestle its shadow-banking sector to the ground without tipping over its economy. The US has better growth prospects.

All this points to “slower yet increasingly stable growth rates,” Bill Gross writes, albeit there seems to be more risk than reward over the horizon. “Financial repression as it continues for years to come will almost ensure that outcome.” While the market is looking for real policy rates to rise to 1-2% by the end of the decade, Gross sees them remaining closer to 0%.

“If the future resembles those neutral policy rates, then the investment implications are striking: low returns yet less downside risk than investors currently expect; an end to bull markets as we’ve known them, but no perceptible growling from the bears.”

--This story was originally published on The Wall Street Journal's MoneyBeat blog